Unlock the editor’s summary for free
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
Thames Water has insisted that he has the right to pay his executives “retention payments” lucrative for agreeing on an emergency loan of 3 billion, establishing the award of public services in a collision course with ministers who are determined to block the awards.
A government spokesman said Friday that the ministers would intervene whether Thames Water persisted in attempts to maintain “scandalous” payments after the company claimed that it could leave a new legislation designed to prevent controversial bonds.
“This is a raw attempt to interpret the public for fools and cover up corporate greed. This government will not remain inalidable if Thames bosses try to loot the company to obtain personal profits,” said the government spokesman.
“The era of the benefit of failure is over. We will take the necessary measures to stop these scandalous payments.”
The ministers have said they expected water regulator OFWAT TO BLOCK THE WATER OF TÁMEIS From delivering the awards to the senior executives as a reward for ensuring the controversial loan of £ 3 billion, which comes with a expensive interest rate and interest rates of 9.75 percent.
But Water Thames He told the Financial Times that, because the payments were “retention payments”, they would not be covered by the new O ofwat powers. The awards, up to half of the annual salary, enter the top of the salaries of executives and other bonds.
The retention bonds do not fall under the water law, since they are not related to performance, the company said.
“It is essential that the business retains the best positioned people to deliver the improved results that our interested parties expect rightly,” said a spokesman for the public services company on Friday.
Thames Water’s challenging position on Friday caused anger within Whitehall, and an official said it was “ridiculous” for the company to affirm that the “retention payments” were not a form of payment related to performance.
Thames Water, the largest water company in the United Kingdom, has become a lightning rod for public anger, since it tries to defend against renationalization under the special government administration regime.
The company, which serves a quarter of the country’s population, is fighting under the weight of its debt mountain of £ 20 billion and is in exclusive discussions with the private capital firm KKR to take care of the business.
The Public Services Company approached dangerously to run out of money Before ensuring the loan of £ 3 billion – Tax in court for rival bondholders – of the American coverage funds, including Elliott Management and Silver Point.
Thames Water has refused to say who would receive payments or exactly how much they would be worth.
Executive President Chris Weston, who was criticized for accepting a bonus of £ 195,000 for three months of work last year, is not one of those who receive a retention payment, said Thames Water.
The company has already threatened with Raise the base salaries of its executives If the government advanced with the plans to restrict bonuses. The scale of retention payments was revealed by the president of the Public Services Company, Sir Adrian Montague, during a common goods committee audience Tuesday.
OFWAT will receive new powers from next month to prohibit the “undeserved bonds” in which the standards on the environmental and financial management of water companies are not met. Those long-awaited powers are retrospective for financial year 2024-25.
TO consultation In the new bonus rules it is still ongoing, but ministers expect them to be in force in June.
Previously, Ofwat did not have the explicit power to prohibit or stop executive bonuses, and could only do so if this helped him fulfill his duties, such as ensuring that companies are financially resistant.
However, the recently approved water law (special measures) is aimed at giving OFWAT the powers to eliminate bonds where companies have not complied with certain standards in relation to “consumer issues”, “the environment” or “financial resilience” of water companies.
Ofwat said: “We are using our powers to demand information from Thames Water urgently about the comments they faced with the Environment Committee, Food and Rural Affairs earlier this week about providing retention bonds.”